For any net worth-based goals, it’s helpful to create a model that shows you a realistic path to get there. This isn’t meant to be comprehensive, or accurate - no plan is going to unfold the way you think. But it can be a useful check on whether your vision is realistic or not. I’m all for ambitious visions. But if you can’t see a rational path for getting there, it won’t be sufficiently compelling and you’re unlikely to achieve it.

So for financial goals, create a simple financial model. This is how I do it - I’m sure there are better ways, but this has worked for me generally:

• Start with current state assets
• Make some assumptions about future income inflows. You might know that your company tends to give raises of X% per year. If you work in consulting or another industry with a relatively defined career path, you can make some assumptions around when you’ll get promoted and what that salary/bonus bump might be.
• Make assumptions about the growth of each asset class.
  • The stock market on average returns 10% per year.
  • The average home has appreciated by 4% per year in the US over the last 30 years.
• Are there any windfalls you anticipate? When do you anticipate those happening? How do you plan to allocate those inflows, and what assumptions can you make about those inflows compounding?
• Any major expenses you need to plan for in the next 10 years?
  • Perhaps you want to purchase a home and have it paid off. Get specific - what kind of home? How many bedrooms and bathrooms? What part of the country? Go on Zillow and try to get an estimate of what homes like that in that area cost. Write that down. Make a guess on what you think the interest rate might be on that mortgage and use that to calculate your monthly mortgage rate. Be conservative.
  • Do you have kids? Want to pay for their college? At the time of this writing, the average cost for 4 years of private college is around 150k. Insane, but here we are. Go ahead and write that down.
  • Do you have aging parents? What’s the state of their finances? Are they going to need support from you? The AARP suggests it costs around 10k per year for family caregivers.

Again this won’t be accurate. But as long as it’s directional and plausible you should be fine.

An example is here - if you have suggestions for how to improve this please let me know!